Smurfit Kappa is expected to join the FTSE 250 within months after the paper packaging giant was granted a UK nationality assignment for the purposes of inclusion in widely followed market index series.

The FTSE National Advisory Committee has in recent days confirmed the allocation, paving the way for Smurfit Kappa to go through a further assessment in June to see whether it can be included in the UK index series of the FTSE indices. This will be based on a test of trading volumes for 20 days prior to the June 1st meeting.

Earlier this week, Smurfit Kappa said it had moved its Irish exchange listing to a secondary one as it upgrades its UK listing to a premium one, in an effort to pave the way for its entry to the FTSE indices.

Inclusion in the FTSE series would force fund managers who track the indices to buy the stock. The investment industry has seen a gradual shift over the past decade towards funds that are passively managed and track benchmark indices, to ones that are actively managed.

Often actively managed portfolios, where money managers pick stocks, tend to have similar investments to passive funds.

Davy analysts Jim O'Neill and Barry Dixon said in a note to clients yesterday that Smurfit Kappa would most likely join the FTSE 250.

Smurfit Kappa, where Tony Smurfit succeeded Gary McGann as chief executive last year, has a market capitalisation of €5.4 billion. The group, based in Dublin, reported a 12 per cent increase in revenues last year to €8.1 billion, while its pretax profits jumped 58 per cent to €599 million.

Smurfit Kappa is one of the leading providers of paper-based packaging solutions in the world, with about 45,000 employees in approximately 370 production sites across 34 countries.

It has a presence in 21 countries in Europe, and 13 in the Americas, and is the only large-scale pan-regional player in Latin America.